Diamonds are forever, wars are not
Subtitle: is conflict bad for private firms?
By: by Massimo Guidolin and Eliana La Ferrara.
Contributors: La Ferrara, Eliana.; Federal Reserve Bank of St. Louis.
Series: Working paper ;; 2005-004A; Working paper (Federal Reserve Bank of St. Louis : Online) ;; 2005-004A.
Publisher: Federal Reserve Bank of St. Louis
Published: 2005
Place of publication: [St. Louis, Mo.]
Language: eng
Format: Electronic resource
Subjects: Civil war -- Economic aspects.; Angola -- History -- Civil War, 1975-2002.
Description: "This paper studies the relationship between civil war and private investment in a poor, resource abundant country using microeconomic data for Angola.  We focus on diamond mining firms and conduct an event study on the sudden end of the conflict, marked by the death of the rebel movement leader in 2002.  We find that the stock market perceived this event as "bad news" rather than "good news" for companies holding concessions in Angola, as their abnormal returns declined by 4 percentage points.  The event had no effect on a control portfolio of otherwise similar diamond mining companies.  This finding is corroborated by other events and by the adoption of alternative methodologies.  We also use nonparametric techniques with daily data on the intensity of conflict, and find that moderate levels of violence increased the abnormal returns of the "Angolan" portfolio.  We interpret our results in the light of the widespread rent seeking in the Angolan mineral industry"--Federal Reserve Bank of St. Louis web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 6/24/2005.
Also available in print.
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Mode of access: World Wide Web.